May 4, 2025
Inside a Texas Architecture Firm with $1.3M Revenue, But No Profit
Tyler Suomala
Creator of Growthitect
Welcome to Money Memos! Money has always been taboo in our industry. But that's shifting…
Despite the growing need for financial transparency, many architects have kept firm finances close to the vest, even with partners and close colleagues.
But now, more architecture firm owners are sharing financial insights to grow stronger, more resilient firms.
In an effort to provide real, candid insights into the financial side of running a practice (and to shake up the silence around money), I've created Money Memos. This series brings you anonymous and rare looks into how your peers are navigating the numbers.
Want to participate? Submit your Money Memo here
Here's a behind-the-scenes look at a 50-year-old architecture firm in the Central Texas, as told by one of the 2 active partners. The firm has 8 employees and focuses on retail and industrial projects.
Office Situation:
We rent and pay market rate (about $1/SF/mo) for an older suite with lesser amenities.
Salary:
Partners are compensated $10k - $12k per month, plus a tax escrow, which is market rate in our area according to the AIA Salary Calculator.
The pay is the same as being a managing employee last year vs managing partner this year (I've been Partner for 5 months). Except, as a Partner, I have to wait a couple weeks for the clients' checks to clear before I can take my distribution.
Work/life balance:
Early in my career, I found myself constantly pushing a playground swing on Sunday mornings while hammering out details with a big client. I eventually established boundaries around my working hours.
I lost the client, but he respected me more and enthusiastically sent me great referrals.
Debt:
Switching the company from sole proprietorship to partnership incurred debts of about 10% of our annual billings. Having a line of credit helps take some of the panic off the monthly budgeting.
We found a no-fee card with about 1% cash back from Truist. $25K line of credit was significantly more than anyone else. We pay certain regulatory fees and consultants on the card, so this was important.
Revenue & Profit:
Over the last 12 months, we've generated about $1.3 million in revenue.
Gross revenue remains constant but the percentage of consultant fees edges up as the project sizes get smaller. We need to find a way to charge more for our services, or increase the monthly volume.
As far as profit goes, we're not there right now.
Best Expense:
Our clients flip out when they see the erasable pen.
#1 Financial Goal:
We've been in the same suite for almost 50 years. I would love to move to one of our newer buildings or communities to showcase the work of our current generation.
Biggest Mistake:
Our local printshop stopped offering embossed lithography business cards, so we ordered regular cards and lost a senior designer over it. We found a printshop in another city to fill the next order.
Book Recommendations:
I used to have a role playing game with pages of elaborate spreadsheets of how to budget all the expenses of an imaginary military unit. Running a business is kind of like that, except on a good day we need fewer explosives.
Firm owners: Want to participate? Submit your Money Memo here